Mercedes Could Send TSLA Stock Soaring
Mercedes-Benz has embarked on an ambitious automobile battery-recycling project that could make electric cars a lot more economically viable. The release could provide a big deal for Tesla Motors, Inc. (NASDAQ:TSLA) and TSLA’s stock price.
Tesla’s entry into stationary energy storage and battery technology has already shown impressive results. Its launch of the “Powerwall” battery project in early 2015 spurred on massive interest in similar initiatives, most important of which is the one by Mercedes-Benz. (Source: “Tesla Powerwall,” Tesla Motors, Inc. we site, last accessed November 23, 2015.)
Mercedes-Benz Is Working on Something Big
Mercedes has launched an exciting new initiative aimed at using recycled car batteries to whip up interest in scaling-up electrical grid storage capacity as well as drawing together the commercial and consumer markets for automobile batteries. (Source: “Mercedes gives EV batteries second life with storage project,” Metering, November 23, 2015.)
Before I go on, it’s important to note that one of the biggest challenges facing Tesla is the ability of electrical grids to support the transition to electric cars. The primary concern is that if everyone were to switch over to a car that requires it be plugged into the grid to charge, our current electricity grid would simply not be able to handle it. Another issue is that electric car batteries typically wear out much faster and create waste in the form of old, useless batteries. These are serious arguments used by those against further developments in electric vehicles.
Yet in steps Mercedes. Its resulting developments in using old batteries could very well tip the scales of economic viability back in Tesla’s favor.
Mercedes’ project focuses on a group of companies collaborating to develop the biggest grid storage facility in the world, and all by using old recycled car batteries in Germany. This technology works by taking the battery from an electric car that is no longer able to start the automobile, but is still perfectly good at storing up to 80% of its original capacity from renewable energy sources. The project will produce approximately 13 megawatts of electric power, which is equivalent to enough electricity to power 130,000 average homes. (Source: “Mercedes Is Proposing A Novel Solution To Meet Energy Storage Demand,” OilPrice, November 22, 2015.) All this from old batteries that would ordinarily be tossed into the trash. Now that’s the kind of innovative thinking that is both environmentally friendly and financially lucrative—right up Musk’s alley.
Here’s How Tesla Stock Can Benefit
If Mercedes-Benz is successful in leading the charge when it comes to reusing old electric car batteries, it would effectively remove one of the big arguments against the transition to electric vehicles. (Source: “What Happens to EV and Hybrid Batteries?” Edmunds, August 25, 2014.) If electric car batteries must be replaced often, and are essentially junk, then what can be done with them?
But if, for example, a Tesla car battery can be reused to its fullest potential after being removed from a car, then all of a sudden, Tesla is a lot more financially viable. There’s also the added perk of the process being environmentally friendly. But that’s not all, because these are the sorts of innovations that typically spur on entirely new industries, providing even more high-tech jobs.
This will effectively drive down the price of electric vehicles, as an important component in their maintenance would then have solid resale value, making automakers such as Tesla more appealing to the broader consumer markets.
It doesn’t take an MBA to figure out that this is a win-win situation.
Bottom Line on Tesla Stock Price and Effects of Mercedes’ Project
As an increasing number of renewable energy options come into play, energy industry experts have recognized the need for grid-scale energy storage. If companies such as Mercedes are able to find successful ways to store energy, while simultaneously providing ways for electric vehicle owners to recycle batteries and offset the initial cost of the cars, the electric car market could enter a boom period.
Old car-battery recycling could, in fact, become a multi-billion-dollar industry, creating spin-off industries and cleaning up the environment. With developments like this on the horizon and more and more people looking at Tesla cars, you can expect that this will cause TSLA stock’s price to surge in the future.